With the comment period drawing to a close on a federal rule that would all but eliminate private transfer fees, Virginia has become the 24th state to either restrict the controversial levies or ban than outright.
The comment period ends Monday, April 11, on the Federal Housing Finance Agency's proposal that would prohibit the government sponsored agencies from dealing in mortgages on properties encumbered by "certain" private transfer fees.
The rule would exempt transfer fees paid to homeowner, condominium and cooperative associations as well as certain tax-exempt organizations. But otherwise, Fannie Mae, Freddie Mac and the Federal Home Loan Banks would be barred from dealing in loans on properties saddled with fees that do not directly benefit the property would be barred.
With limited exceptions, the rule would apply only prospectively to private transfer fee covenants created on or after the date of publication.
The proposal puts a federal stamp on a process that already has been restricted or banned outright in now almost half the states.
The Coalition to Stop Wall Street Home Resale Fees, a group dedicated to ending the practice, maintains the fees steal home equity from consumers, filter money away from communities and community development, infringe on property rights, and interfere with the safe and efficient transfer of real estate. The Coalition's members include the National Association of Realtors and the American Land Title Association.
Meanwhile, Virginia has joined these states in restricting the fees: Arizona, Arkansas, California, Delaware, Florida, Hawaii, Illinois, Idaho, Iowa, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, Nebraska, New Jersey, North Carolina, Ohio, Oregon, South Dakota, Texas and Utah.
